Magnum Hunter Production Update
Magnum Hunter Resources, Inc. announced a significant production increase on its South Timbalier Block 265 complex and a successful confirmation well drilled on the previously announced Eugene Island Block 397 discovery.
Production from the ST Block 265 complex has recently increased from 8 million cubic feet equivalent per day (Mmcfed) of gas in April, 2000 to current rates of approximately 25 Mmcfed of gas, due to a recent discovery and two successful recompletions on ST Block 265. Scheduled development of recent discoveries on the offsetting ST Blocks 250, 264, and 266 during late 2000 and early 2001 is expected to add new incremental production in excess of 30 Mmcfed of gas bringing total production from this complex up to approximately 55 Mmcfed. Currently planned drilling and workover activity on the ST Block 265 complex could add additional production of over 20 Mmcfed of gas.
The "A" platform on the ST Block 265 complex will process production from ST Blocks 265, 266, 264 and 250. To-date, oil and gas discoveries have been made on each of these blocks and two successful re-entry wells have been completed on ST Block 265. Magnum Hunter is operator of the ST Block 265 complex and owns a 50% working interest in all four Blocks. El Paso Production Company, a unit of El Paso Energy Corporation owns the other 50% working interest in ST Blocks 265, 266 and 264, excluding the ST Block 265 A-4 well where El Paso holds a 60% working interest and Magnum Hunter holds a 40% working interest. Chieftain International Inc. owns a 50% working interest in ST Block 250.
Additionally, drilling and logging operations at the Company's Green Canyon Block 48 #1 well have been finalized. The new well located in 472' of water, was directionally drilled to a measured depth of 10,370' from a surface location on Eugene Island Block 397 to a bottom hole location on Green Canyon Block 48. Wireline logs and sidewall core analysis indicate over 100 feet of apparent oil and gas pay in three sand intervals. This well encountered the target sands 1.5 miles south and over 1,100' structurally below the lowest known hydrocarbon bearing sand logged in the initial discovery located on Eugene Island Block 397. Development plans are underway for the new discovery that includes Eugene Island Block 397 and Green Canyon Blocks 4 and 48. Magnum Hunter owns a 12.5% working interest in this new field which is operated by W & T Offshore, Inc. with a 50% working interest. Remington Oil and Gas Corporation owns the remaining 37.5% working interest.
Commenting on these recent developments in the Gulf of Mexico, Mr. Matthew C. Lutz, Chairman and Executive Vice President of Magnum Hunter stated "Our
operated ST Block 265 complex has become the Company's most important area of production in the Gulf of Mexico. The gross production from this complex alone could approach 75 Mmcfed of gas in early 2001. Magnum Hunter has also participated in thirteen additional exploration discoveries with other companies on various Blocks in the Gulf of Mexico. Eight new platforms are expected to begin production during the first quarter of 2001, including three platforms in the ST Block 265 complex. Four additional new platforms are expected to be in place during the second quarter of 2001. Also, one new platform should be installed in the second half of 2001 to begin full development of the Eugene Island discovery."